We’re discussing the privacy concerns with Apple’s new child protection feature, Huawei pressuring US businesses for backdoors, China’s ownership stake in Bytedance and Weibo, SpaceX’s quiet acquisition of Swarm and what it means for 5G and IoT, and the news in crypto…
We’re discussing the privacy concerns with Apple’s new child protection feature, Huawei pressuring US businesses for backdoors, China’s ownership stake in Bytedance and Weibo, SpaceX’s quiet acquisition of Swarm and what it means for 5G and IoT, and the news in crypto…
It's The Next Wave Podcast, Episode 44. I'm James Thomason here with co-hosts Dean Nelson and Brad Kirby. We're back to the news this week carrying on from Episode 43 with the latest in the AI space. We're also discussing the privacy concerns with Apple's new child protection feature. Huawei is pressuring us businesses for data backdoors. China's new ownership stake and ByteDance and Weebo. SpaceX's quiet acquisition of Swarm and what it means for 5G and IoT and the latest news incrypto. Dean - It looks like you're back in Hawaii again.
Dean Nelson:Hello, my brother. Aloha. Yes,
James Thomason:Do you like live in Hawaii now?
Brad Kirby:Did you move there?
Dean Nelson:I did not move there. Last year during the pandemic, you know, I tried to go to Hawaii, I couldn't go to Hawaii. All the stuff we talked about before because you couldn't get flights and then all the lockdowns and restrictions and things. And so I ended up booking two different trips, thinking okay, one of these has got to work. And so this year, we decided I'm working remotely anyways, I'm just gonna work from Hawaii. So this will be four weeks in Hawaii, just over two different months. So yeah, there are worse places to actually work remotely.
Brad Kirby:Yeah,
James Thomason:I had a really good friend at Ewa Beach and he would get up at four in the morning do his US business and you'd be off work by like noon. And so then he had the whole afternoon evening with his kids was pretty good lifestyle for him I think.
Dean Nelson:Yeah, I got up at 430 this morning. I've been doing the exact same thing. I watched the moon set and the sunrise.
Brad Kirby:What's the time difference? Is it three hours from Pacific?
Dean Nelson:Yes, it's three hours earlier, which is great. So 6am here is 9am there works out great. Right.
James Thomason:And Brad, you're back home, right? You didn't get caught any of the forest fires out in BC this week?
Brad Kirby:Yeah, it seems like the bad AQI is following me everywhere. So the IQAir app was showing up to our 450 near where I was in BC in some spots. My drive out to Whistler was Sybil's first time with me and one of the weekend that just passed and it was pretty much all smoke, so I couldn't even see the mountains or anything. But it was nice to get out in Tofino and did some salmon fishing caught a few salmon that are getting shipped back to me and kind of connecting the wilderness. So it was it was good trip. Yeah.
James Thomason:Well, today is another day of post-apocalyptic orange haze. Smells like barbecued California in here.
Brad Kirby:I wonder what the AQI is? Probably pretty bad.
James Thomason:It's gotta be really bad right now because it really actually smells like densely of smoke. So. And there's that orange glow. Yeah, permeating everything we did that week last year where it was just like, completely or look like the surface of Mars outside that was that orange? And it's not quite that.
Dean Nelson:Blade Runner that's for sure.
James Thomason:Yeah, Blade Runner. Totally.
Brad Kirby:So the IQAir app has another feature you can add it actually shows the fire emblems on the map, too. I don't know if that was added since we last talked about it. But you can see all the forest fires up the West Coast. It's pretty, pretty nuts. Vancouver is getting covered from the Washington State fires and that it went from about 10 AQI to 250 in a matter of hours.
Dean Nelson:Yeah, I was I was traveling again and I was over in Utah, meet with my team and I walk it was in Salt Lake City going man, is there a fire round here? And they go, nope, just California. Walked in, I'm like, Ah, this reminds me when the fires are happening. I was going to San Francisco and that haze just across what was going on with a Napa fires took multiple years ago. Right. Right. Is it just like you said it's apocalyptic with all the things that are going on between the earthquakes and the and the fires and temperatures
Brad Kirby:Cayman Islands had its first hurricane in 15 years this morning. So one of our colleagues, Doug steel is stuck there. Their power's out. So everyone's electronics are dead.
James Thomason:What a great way to get out of meetings to he just you know, he's like, I can't start any of my meetings about the power is going out now. Now. *Click* that was it. I'm losing you. I can't hear you. Yeah, he's he was out today. So, but everything's fine. Dean do you have enough room in your hotel room for me? Is there another bed there? Or are you gonna have to be the little spoon?
Dean Nelson:Did you say a little spoon.
Brad Kirby:Yeah, the little spoon next to James. James is pretty tall.
Dean Nelson:You totally caught me off guard on that.
James Thomason:Yeah, Worst of all, he visualized. You can see it in his face. He visualized that comment. Let's give it a shot. All right on the lawns here outside. Well, on the heels of Episode 43, there was some news in AI this week on GPT-3 from OpenAI that enables AI to read written instructions and transform it into working code. Brad, this was the database that Amelia was using when we were trolling it last week, right?
Brad Kirby:Yeah, that's correct. And our Amelia episode just came out and Josh refer to it as the "witty responder". And the responses he said all effectively came from OpenAI GPT-3 database that was released last summer. So the latest product is a substantial development in the world of AI really because it enables a cognitive AI or a person to really take natural language, speak into it, and it turns it into JavaScript, you can actually see the JavaScript running. So it's a pretty, pretty significant advancement. So not only can AI do it, you can do it yourself. And it's in beta. I applied to try to get into it, but I don't know if I'll get in. So I know Amelia already had the ability to code other AI with conversational AI, so that he she could create the digital employees, right, that's one of their products. But this latest release goes beyond just conversational AI. It's coding in general. So pretty soon, pretty sure monkeys will be coding and the Planet of the Apes will become reality.
James Thomason:Well, the good news is that the machines are getting smarter because the people are getting dumber
Brad Kirby:Idiocracy.
James Thomason:Literally living in idiocracy at this point, who knew that movie would have historical significance.
Brad Kirby:Very prophetic.
James Thomason:So prescient.
Brad Kirby:Prescient, okay.
Dean Nelson:So again, for the people that are listening that you have not seen that movie, Idiocracy, it is a must have now, you need to look at that and see exactly what our world could turn into.
James Thomason:It's incredible. We're there. Yep, we're there
Brad Kirby: "Brawndo:Electrolytes, it's what plants crave."
James Thomason:Okay, onto them a less happy subject. Unless you're living under a rock, you've probably heard about Apple's newly released software feature, which is going to scan users phones and iCloud data, for objectionable materials, specifically, child pornography. Concerned employees actually leaked this to the public, which I thought was a really good move, because this is an incredibly invasive thing to do, in my humble opinion, with respect to personal privacy, and thoroughly crosses the line into surveillance. And the way the feature works technically is it uses a known corpus of child pornography. So these are, this is imagery and videos and other media that has been identified by human beings as being child pornography. And so what they're doing is they're taking the actual digital signatures of that they're hashing those images to result in comparison between what is in a user's folder on iCloud or on their phone, and this known corpus of child porn. And so it just seems to me like the end of individual liberty always starts with something that's almost inarguable, like you want to prevent child porn, who in their right mind could possibly argue against preventing child pornography. But the fact that this feature is that it doesn't do anything to prevent child pornography, it just it catches people who have ended up with this data, however, they ended up with the data. And I want the audience to reflect on this a little bit, because this kind of imagery and data falls under an area of law known as strict liability doctrine. So this is like, if you have this data on your phone, and they turn you over the FBI, which they are saying they will, what they're going to do is scan your photos. And if you have some of this imagery in your iCloud anywhere, they're going to manually validate that with human intervention, and then file a report with the appropriate law enforcement agency. So people will get turned over to law enforcement as a result of this. And the danger of doing that is that I doubt that anyone has any idea what's really on their device at any moment in time, like you don't know what data is on your phone? How would you know. So while it will definitely will catch people who have intentionally placed this data there, it also opens the door to prosecuting people for possession of something that they had no idea that they had. And because it's under strict liability, it's a go to jail thing, there is no defense, it's like when you get pulled over for a DUI, and you blow higher than the permitted alcohol, blood, alcohol volume, I mean, there is no defense you technically were DUI. And that's that the difference is you had to make a choice to drink. But in this case, it's the same kind of law where if they find this on your computer, you're guilty. So you're, you're going to prison, probably. And you're probably gonna be branded as a child pornographer. And on a watch list for life as well, that says nothing about how the data got there. If you look at all the exploits that have been happening and the hacks, right, this is like the new way to get someone in a lot of deep doo doo, right? You just you hack into someone's device, you put data that you know, is in this corpus there or it's likely to be there and boom, they go to jail. So James, you know,
Brad Kirby:I'm no, I'm no stranger to getting hacked. So this is obviously a concern to me. But I have a question. So you mentioned that it's getting hashed and then compared. So effectively, they're still they're not looking at the actual images or data, right, they're looking at the hashes.
James Thomason:So look at the hashes first, but also, they're not disclosing the hash algorithm. So we don't have any idea. If there are collisions possible in this hash. I mean, no one no one in the cryptography space, no mathematicians outside of apple and whatever private, or public agency they're working with to do this has looked at this, right. So it can They have collisions, right? And that's why they're saying they're going to take the step of manually verifying with the image is.
Brad Kirby:So I wanted to ask about that in terms of, because I'm just thinking, from my perspective, if someone wanted to blackmail me and put a picture on, right? Wouldn't you be able to post-humously do the forensic analysis on the image and be able to identify that it did come in from a different source?
James Thomason:Not really. I mean, that's all that's all forageable data. It isn't like, you know, it isn't like your laptop has an immutable record of this stuff, where data came from or something, right, there's no, there's no ledger on.
Brad Kirby:If you get in the forensic imaging of it, there's some potential to be able to, but obviously, you're going to go through a lawsuit and it's a disaster.
James Thomason:Yeah, you're gonna get arrested and accused of child pornography, you're gonna lose your job and probably your train spouse, maybe down the long road, you'll you'll get acquitted. But if you do, I mean, you're you're tainted for life. It's one of those things that has such a huge social stigma attached to it. And I think if you're acquitted, you're never really acquitted. Right? I mean, what's your accused of that? Kind of?
Brad Kirby:Yeah, I guess you'd have to possess that image in the first place to put it on someone's computer, too. I'm just trying to like, because I'm scared of this myself. And it's always something I have been.
James Thomason:Brad's been hacked repeatedly. So he's, yeah,
Brad Kirby:Because I'm in the crypto space, right? Like it just people think I have crypto and, and then I store my keys somewhere. And then I don't Right, right.
Dean Nelson:So the try to hack your system? Yeah, yeah, maybe we should back up for a second, because we kind of got went down one path. The intent of this is to go back and capture people that are doing very bad things. And so this whole thing about"the road to hell is paved with good intentions", I think that's what this intent is, is to go back and say, "we should be able to scan and find and help stop, right, exploitation of children and all this stuff." So the intent i think is correct. I think the implementation is the risk. I agree with you guys that when all of a sudden, everything that you've got gets scanned all the time. It's kind of like when you have machines that are going and doing matching, if you ever do a search on Google, and you start to look for certain things you see biases all over the place that come up in those searches, just based on the machines algorithms. And while I think it's all defensible, I still think it's just the civil liberty aspect of this. I think it's already starting to backfire on Apple, because I don't know about you. But first off my stuff that I've got in there, I don't have anything questionable. There's nothing to worry about. But just somebody scanning everything that I have. I guess I guess this is some more specific than what it was before. Because if it's in the cloud, it's getting scanned anyways. It's not encrypted. Facebook does this. Everybody does this to go back and scan data. There's a very specific focus on trying to capture certain perpetrators. But like you said, all it takes is one person that's out to get you and think about it this way. I remember in 1992, there was a guy that ran a message board. And he went to prison, because they had part of AT&T source code on his servers. He was the guy that actually hosted the servers, the FBI, like hammered down on him. He's like, well, I run I run a message board, I get people going back and forth, like, Yeah, but you're hosting this, and you're going to jail. And he went to jail for three years. Right? Yeah. For having for having source code. And it was somebody else that was on there. That's different than yours. But I look at that going. He wasn't guilty. Yeah, but he would directly went to jail.
James Thomason:Yeah, same, same kind of thing. And what if, what if the person that's out to get you isn't a person but it's like a well funded government? For example, you know, what if? What if you that's the problem with all of this stuff, right is like you the potential for abuse within the context of our system of government or in the context of hostile foreign actors, right? Who, let's face it have have already weaponized this stuff, right. And then you have on the heels of this announcement by Apple, on the same day, I think Homeland Security, DHS announces that they're not going to rely solely on in house systems to spot so called extremist threats on social media. They're also going to turn to external companies like the startup Logically, that uses a mix of AI and human analysis to track online content, large scale, so that if you look at that as a trend, right, so now, Apple has cracked the door open and said, Well, you know, we're gonna let you in with certain corpuses to look for child porn and and then DHS is going to come in and open the door little wider like, well, we need to come in and look for extremist content. But what's that? Well, we can't tell you. That's a national security secret. I can't tell you what extremist content. Here's the hashes, though. These are the hashes, I want you to look for Apple, you have the technology to look for these hashes, right? Okay. So great. You give us your code, we'll give you the hashes. And we want you to inform us whenever you find these hashes in the data, I mean, that's, that's the very next thing that I assume is already happening or will happen.
Brad Kirby:Also, what's the method that these are being transmitted? Right? There's specific applications that have encrypted communication protocols like the people that are using it, they're not using like the insecure standard baked-in or pre-loaded messaging application. They're using encryption.
Dean Nelson:And they know they're doing something illegal. And so of course, they're gonna take, they're gonna take steps for it.
Brad Kirby:So darknet diaries podcast actually goes into detail with somebody who was actually he admitted on the podcast that he, he was guilty. And they have a whole episode on that that came out with Kik messenger, which is a Canadian company that actually got into crypto and it's a wild wild, wild, episode it can ultimately, you know, this guy went to jail. And I couldn't even finish listening to it, because it's pretty, pretty dark. But that's what they were using was Kik to exchange. And I've actually met the CEO and Founder of Kik, they raised $400 million through Ico three or four years ago, wow, it was once the fastest growing like app. And it's what younger kids use to communicate. But that's how these the actual actors were using it like they were using Kik, and Apple's not gonna have access. So I think it's crazy. That's what I land on.
Dean Nelson:That's an interesting perspective. Because if you look at, criminals go to great lengths to hide their criminality. And so if you think about it, if somebody is openly putting stuff into a cloud platform, they're not really worried about things to begin with. Okay, what's the percentage of that one? Then you look at everybody else that's on a platform, you start scanning those different things. It's that civil liberties aspect, because if this happens this way, what's it gonna do? It's gonna drive people off the platform, first the perpetrators, but also people are like, you really should be looking at my stuff. I got nothing to hide, but I don't want to look at my stuff. I don't want this mash thing going across my stuff. Right? Yeah, this way. You got kids, you got pictures of your kids, when they're growing up? Is that going to hit a hash rate?
Brad Kirby:And that's why the nothing to hide argument becomes invalid as a result. Yeah, it's just that is concerning. James, we just convinced him to come onto our side on privacy.
Dean Nelson:So I just I just put that in. It's like, I have at least 36 terabytes of data, right? I can't fit it in cloud. So I just put my images up, but like video and all the other stuff, and I film everything, you know, and it's a really interesting issue here. It is going to drive people because that would make me question. And I'm an avid Apple, user, everything because I love the platform. I'm all in, right? All devices, all data, all those things. But all of a sudden, if that goes out that way. It's like, ah, I don't know, maybe there's a different platform.
James Thomason:Yeah, I mean, this is this is a delete button event for me. So if, if this goes through, I'm not buying any more Apple products? So are you going to Android, then? I've bought Apple products since I was 12 years old. That's how long I've been standardized on Apple. So
Dean Nelson:Wow, five years ago, huh?
James Thomason:Yeah. I won't be going to Android. No I don't think going to the the world's largest. Google doesn't exactly strike me as a better alternative. Let's face it, it's also a de facto US intelligence.
Brad Kirby:As an Android user, I can confirm that.
James Thomason:So I think this is one of the things where at least, the tech savvy among us, will start to switch platforms. And that's that's often the way that trends start is the savvy people go over to another place, do something cool. And then then they get followed, right. And this is a delete button, a red button event for me like I can't I cannot support Apple who has always touted as privacy and who has openly defied the FBI and others in terms of opening its data and encryption. Exactly. For them to turn in. Yeah, I can hear a high pitch whine coming from Steve Jobs' grave, he's got to be doing 10,000 rpm. You know, yeah, it's awful. And continuing this theme, so other news, Beijing now owns stakes in ByteDance, Weebo and other domestic entities, right. So tell us about this, Brad?
Brad Kirby:Yeah. So it was leaked. I think the information first reported and that was picked up by all the other outlets Monday that they acquired stakes in the domestic subsidiary of Bytedance, that runs TikTok. And I assume it probably has something to do with the previous pressures from the former president. But on top of that, really, this just it seems like another surveillance play for world's largest surveillance state. And it's interesting, because we're talking about surveillance with respect to iPhones and our privacy. But in China, that's potentially you could argue, is the world's AI superpower. Are they doing this out of fear and of AI? Potentially? I don't know. I'm just spitballing on that. But are they doing it for the protection of their citizens? Or is this or is this more of a global domination play?
Dean Nelson:I think it's both its control, right? Visibility?
Brad Kirby:Yes, just
Dean Nelson:Think of the way that China operates and you know, that's a great book we've talked about on the podcast a lot, right? AI Superpowers and the ability that they've got access to all the data already. And they do that for all good intentions to which is finding, you know, cures for cancer and rapidly accelerating other things. But, again, it's the same thing with tech, you've got access to all the data and so when they don't have access to the data. So you think about crypto, what's happening, they were out of control, and others were aggressively driving the cryptocurrency. And now you think about this one. There's other companies that have data they don't have. And so I do think that that's, it's about control and visibility into it to make sure that they can direct the way they want to they want to direct as a country.
James Thomason:That's what it seems like. And dovetailing with that news was, I guess Huawei has been accused by the DHS for pressuring us firms into installing data backdoors. So Huawei insists on creating a duplicate version of the Lahore network in southern China that would provide direct access to Pakistan's data. And this was reported on the Wall Street Journal. And so you can see this general trend of big government's pairing with big tech to put their fingers into everything. And then and then the overarching threat of, of hackers from both amateurs as well as professional state funded interests, right. I mean, this is this is a mess. This is a mess with privacy and the case of Huawei, Huawei makes a lot of things that can be used in critical, in the nation's critical infrastructure, right, and that's something we've talked about on the podcast before. But yeah, the previous administration had something called the clean network initiative, which was meant to purge all non-US manufactured components from critical infrastructure and the whole the whole supply chain there. That site suddenly disappeared with the new administration. But I don't think that the program has been fully shelved. I think it's in a quasi dormant or stealthy state is going to reemerge us something new in the next year. Because that's, that's a US security interest that has a very long tail to it, something that's been going very long time, transcends administrations right. So I think I think that's going to come back up again. Well, let's switch gears a little bit, there was a little bit of a little bit of the door cracking open in terms of getting back to normal. And then then I was sort of disappointed by it. But the cloud native computing foundation, unveiled the schedule for KubeCon. And for the nerds among us. That's the that's the Kubernetes plus cloud native everything big conference, muckety muck that takes place in California every year, it didn't happen last year, of course. But this is on for October 11 to 15th in Los Angeles. And just keeping with the theme, I first thing I did is I'm going to sign up and go, I'd love to go to a thing. And then they're like, well, you have to have a vaccine passport, like, Okay, I'm not going to cooperate showing my everybody could do what they want. But I'm not going to cooperate showing my papers everywhere I go. I don't mind doing it to go to a foreign country. And that sort of thing. I mean, I understand the need the need to do that and protect medical resources in the country. But I'm not doing this at the grocery store or KubeCon, it's just not, it's not worth it to me. Everyone do what they want. But if you do go to KubeCon, I guess there's gonna be a virtual, the good news is there's a virtual side of the show. So we'll get to be able to do some kind of attendance, even if you're a principal rejecter of vaccine passports like myself, or if you just don't want to make it to LA, or you're scared of the Delta variant or you're scared of people because you've been locked inside your home for almost 18 months.
Brad Kirby:It doesn't surprise me that you're rejecter of vaccine passports. This is kind of related to what we were just talking about and privacy and data, what is directly related. I guess this is why I think we should have been, the three of us should have been developing the, the applications around vaccine passports and zero knowledge proofs and whatnot. So that so that we can actually validate that hey this person did get it. In this case, to me, it's it's a bit of a I'm okay with it, as long as the controls are in place to share the encrypted information.
James Thomason:But that's the thing is these certainly are not.
Brad Kirby:Yeah, so if that's the case here that I strongly disagree with that it needs to be encrypted, it needs to it shouldn't be human readable, because then you're talking about health records being taken and you get into HIPAA and all that kind of stuff.
Dean Nelson:So are we are we actually speculating or is this based on info because HIPAA is a really strict requirement?
James Thomason:Yeah, here's the deal with that. So HIPAA only applies to medical providers and insurers, it does not apply to ordinary businesses. And so I tweeted the KubeCon folks and said, Hey, KubeCon requires disclosure of personal health information to attend. What safeguards and processes are in place to protect my health information and assure it's not misused or disclosed improperly. I got no response to that.
Dean Nelson:And I wonder why they're like that James Thomason dude, man, here he goes again.
James Thomason:Here he goes again. Yeah, think of that. So that's the problem is there is no HIPAA. If you go to your local cafe and hand them over your vaccine data or your personal information, they have it or you know, maybe if they take a scan of it, who knows where that goes, there is no safeguard no encryption, no nothing protecting you legally with that data or otherwise. And so that's that's part of my opinion, my principal rejection is not just not just the police state aspect of it, but it's also like my it's my information. And sure it's so it's one vaccine or one booster, and then it's another booster and then it's 10 boosters and every vaccine you've ever taken. It's just an explosion of this information right and who owns this information? Who controls it? How is it made safe? None of those questions are ever answered, people just do things without thinking.
Dean Nelson:Let's segment this a little bit, because I agree with you, they the information and keeping privacy and all the other aspects of it. But let me give you a perspective right now on where I'm at. Hawaii requires you to have a vaccine, right? Verified vaccine within 14 days, or a test negative to come into the, onto the island. And to do that I had to upload my vaccine card into into their systems. Right. And I did, which is basically the things I had, and I did that for my entire family. And then they get back this passcode, a QR code that says I can scan and do that. And I feel safer here than I do in anywhere in the United States right now. Because I know there's some gate, there's something that requires people to go say, look, I view the tested negative, or I've taken the vaccine. And so when you come out at the probability of infection becomes much, much lower. And so I look at everything else, I cross the state line, I fly in a plane, I do anything else inside of the continental US, I have no idea. And so from my perspective, personally, I'd rather have that. And I would rather give up that information for this one for my own safety.
James Thomason:Why is an interesting case, because it's an island unto itself, it's almost an island nation, it was an island nation, it's an island unto itself. And it has, by virtue of that very limited medical resources. And so it would be very easy for the population to become very ill, and for them to run out of resources, and then to have no way to get patients somewhere else. Like if you're, if you're overwhelmed in a hospital in LA, they can drive you to Las Vegas, or Albuquerque, or El Paso or San Francisco. But there's options, right? There's the system here, can distribute load better, and you're confined ambulance. In Hawaii, that's not the case, right? Because it gets you somewhere else. It's an Eric, it's a flight, they're putting on a flight with other people. It's very expensive to do that. So and also, like, it's not safe, because you're very ill. And I kind of understand that like, by virtue of being an island nation unto itself, that they simply cannot allow people in without these sort of draconian measures. However, the attendance of something like cube con, which is already full of people, okay, that's, and let's be real, like the testing isn't that good. And the vaccines don't prevent you from being infected. I mean, that is that prevent you from getting sick. And so these measures do not stop the disease in any way. And by virtue of going to the thing, you're sort of accepting the risk. That it big convention, like you know, that people around you have COVID, they have it, for sure. Even the people there who have tested negative, some of them haven't even the people who were vaccinated, some of them haven't, and you can get it, I think that's a risk. That is an independent decision the individual makes when they decided to go to this thing, now going to Hawaii with some of the resources. So I did the same thing you did. And I went to Hawaii, and I turned over information. And it was to a government agency, the public health system in Hawaii, I didn't feel like my privacy was really violated by that, because it was a government agency for the limited purpose of allowing me there, and they were trying to control a public health minister, so that I kind of get, but the idea that we're going to put our medical information in private hands with those safeguards or controls. And as a matter of fact, that doesn't do anything to prevent, or to promote public health and safety. It's just, it's just a show me your papers, please. Kind of authoritarian stance. And that framework is on place that that I can't abide by.
Brad Kirby:So I want to segregate it one more piece from showing your papers versus handing over your data. Right, because we all saw our papers. When you check into a hotel, you give your driver's license and a credit card. That's enough to commit identity fraud. And I checked into a hotel last weekend, and they made you upload your driver's license. It was encrypted, it said is encrypted. I didn't go and check the service. But I don't want it because and when you fly to Vietnam, they'll take your passport and they photocopy and keep a paper record of it. Yeah, for sure. So I think I think there's a method where you can create a vaccine passport where you do show your papers, but they're not taking your data and are reconciling it versus your information showing that you did get vaccinated probably saw me scrambling around. I don't know where my vaccine passports are. They're like little papers. I don't know where they are. They're usually here.
Dean Nelson:Oh, I just scanned them out of your iCloud account. So I already have. I think my phones.
Brad Kirby:Yeah, yeah. Except I have android.
Dean Nelson:so that you bring up a really good point, Brad. I like the fact that we already give this data out. So James, maybe we step back into a tech discussion about this. If we had actually followed through with one of our discussions about a new app that was secure that allowed you to say I don't know VacCom or something vaccines.
James Thomason:Smell you smell me?
Dean Nelson:Yeah, not the smell you smell me? No, no, yeah, stick you stick me or something. No, that's gonna stick in the arm. So if that was available, and Then now you basically had just like your driver's license, you have a government, right secured element and you show that one, when you walk in is like, this is my vaccine, they scan a QR code and they validate versus you providing the data, they're validating that thing that you, you could be creating an immutable ledger in that manner, right? Where you're validating the content, but you're not providing the content, you're just saying, this is where the state my latest test, or my vaccination, and so that if you walked into the door at KubeCon, and basically had that scan one of those two things, you're not sharing your data, right? You're basically saying, okay, here's the state, and then the probability of transmitting more is lower, not perfectly right vaccine is not that you're immune to at all. It's just a lower probability of any impact and the actual efficacy of saying how much I'll be hurt if I do catch it. But would you go that route, if there was a secondary system?
James Thomason:I think that's the only type of system I could support would be in the very limited case of a third party public interest organization, like a nonprofit in other words, which was a cooperative between businesses or that type of thing. There's a real danger to historically speaking to allowing your government to track everything you do. Sure. And we don't know what the future holds. We don't know who's going to be in power in the future. And we don't know what their mindset is going to be or what they're going to think about the things that we have done and said in our lives. And so I think that's a real threat to democracy. And I think in general, these systems are a threat to democracy. But I think there's a way for the limited purpose of also like your showing vaccine cards are easily forged. They already I think they already caught a ship that had like, metric tons of fake US vaccine cards on them already. So people are forging these documents. California is trying to I do believe trying to create a public Clearinghouse. I think in the state of California, there's a system where you can go and submit your vaccine info. And that results in the QR code. Yeah, that businesses can then scan that. So I think that I think in California, that such a system is already in place, but as a real, as long as it's unidirectional like that, like, you know, the business can verify the authenticity of the QR code without resulting in tracking. Yep. Yeah, that's that's sort of one thing. But again, this is a burden that people face also, and like, part of the principle of our society is that people are free to do what they will. And this is a real burden to that and if you if you say that the burden is going to be extinguished, the moment that COVID disappears, that's kind of where I put the test to like, I don't think so. I think these systems when they, when they emerge, when they get used the very what is the government or any authority ever backpedaled on their authority? Like they just don't let me let me extend it expanded. But
Brad Kirby:Sorry, when you say burden. I mean, really, it's an it's a control, right? Controls are burdens is an extra step you have to do to take measures to protect whatever it is that you're trying to control, right. It's an internal control for that specific piece. And controls, inherently are burdens like, as an accountant, you know, I'm a chartered accountant by trade, I don't do accounting, haven't for a long time. But we're talking about internal controls. And this is really, it's a control, just like if you're going to set up a bank account, you need your two pieces of idea. It's a burden, because some people might not be able to afford to get a driver's license. They've never maybe I've never driven. You have to pay $50 to get it or not driver's ID Right.
James Thomason:Yeah.
Brad Kirby:Yeah. So I certainly agree that it's a burden. It's good that governments are taking action on it, but I don't think it's, I guess we're on the tech like, we have something called CanImmunize here that's being used kind of patchwork just like governments are. I mean, especially in Canada, our healthcare system is so fractionalized that it's even Ontario has, our province has two different health authorities that were just merged because of COVID. And really, in my head, it comes down to similar to any sort of other form of identification. There were vaccine passports 100 years ago for the Spanish flu. I think there's just a very easy answer to this in my head and it's really to your point around you're okay with being giving out one way bi-directional data that nobody can utilize.
James Thomason:Well, I don't know I even I even backpedal on that. Because as soon as I said that, what popped in my mind was like, wait a minute, okay, remember the no fly list? And the poor sob is that got on the no fly list by mistake? What is your course of action if the system doesn't work as an individual, like if you're, let's say you get your QR code and it doesn't work for any reason, technological human error, whatever the reason is, what are you going to do? Now you can't go to the grocery store. You can't go to a you know, you can't take a flight. You're a helpless individual for which there is a system erected to prevents you from living your natural life and freedom of movement and the freedom to live our lives as we choose is something that's constitutionally protected in the United States. That's not true worldwide. And so I think I think these things infringe on our constitutional rights.
Dean Nelson:James, think about it, though, we already do this. So you have to get a license to do something, you have to get, you know, something to be able to do a bank account, so they infringe on, there are certain gates, you have to go through on a lot of these, I think it still comes down to a decision on, you know, your civil liberties of being able to now share information is based on a decision you want. Like for me, I want to know, at least what's going on where I'm going to be because of the pandemic, I want to know who's around me. Like when I travel into another city? I don't know, who sit next to me exactly any of that, right. That's why I feel safe. In Hawaii, at least that Yeah, there's a much lower probability that something's going to happen here. And so for me, the ability to go do what I need to do, I'd absolutely take that application and scan it to be able to say, Great, yes, I'm going to share my status, my status is that I'm vaccinated and unvaccinated within six months. Good. Okay. And then if I know that it's like, okay, I go into KubeCon. I know somebody scan to that thing. And they know that at least the group of that people have passed the gate, that I feel more comfortable in that room with that group of people. And look, even the people that are faking this, eventually things are going to get caught. But what's the percentage of that that's going into it? Well, there's going to be people that try to thwart the systems all the time, but it's still a smaller percentage.
James Thomason:I mean, once the system's in place and the government is scanning your, your photos and everything for objectionable extremist material, they'll flag you as a person who said something that some politician didn't like, and then you won't be able to go anywhere. I mean, that's,
Brad Kirby:It happens. Yeah, I have I have good friends.
James Thomason:Yeah, that's how the system is being used in China right now. That is, that is the way that people live in China. Not just with this, but with the social credit system.
Brad Kirby:And it will happen, your fair to say that I think it's a such a small, immaterial number, that error in terms of for the greater good and what it's doing. I think the trade off, is that yes, that's going to happen for sure.
James Thomason:Well, it's just like we were saying earlier, like the greater good when no one has privacy, is that really the greater good? And in the case with the child pornography issue, right, like, to me, it's the same thing, like you're violating people's individual sovereignty for a set of half measures that isn't even an effective like we I mean, the science doesn't say that all this information tracking leads to better health outcomes. There's no, there's no data on that. Right. I stopped short of saying that it doesn't because I don't think the data, I haven't seen the data.
Brad Kirby:But it could reduce the hospitalizations, right. Like in Canada, there's all of our new cases and this latest spike, there are almost exclusively non-vaccinated people. And the Delta variant, we're not immune to the Delta variant. So we could be transmitters and not even realize we have it.
James Thomason:But that's a good reason to encourage people to get vaccinated not a reason to track every human being on the planet wherever they go at all time.
Brad Kirby:Yeah, that's fair. But at this time, everybody's not vaccinated.
Dean Nelson:And this is this is extremes, what we're talking about here.
Brad Kirby:Yes, we are. Yes.
Dean Nelson:The simple thing is that we're all trying to get out of this pandemic. And if there's a step, as long as it doesn't lead to an authoritative state, like you're saying that once that opens up, then everything is dragged in that manner. It's like these steps to be able to get there as long as there's gates to stop from that stuff going in. Like for me, like I said, before, James, you and I. Yeah, you and I are on like, totally different sides of this thing, which I enjoy discussing and debating, right, respectfully, which is always really good. But the whole thing is like, I'm okay, sharing a lot of information on the other side, right? You're not okay, sharing informationn on the other side. There is definitely a happy medium in this because I don't believe that everything should be going that way. But I also think it shouldn't be restricted all the way down, there's got to be some compromise in the middle to say, that's actually better for everybody. Now, the definition of what better is, right now, if you take the pandemic, the whole point is to try and say how can we slow that? And how can we get back to life as normal, as much as normal as we can. And to me an app that allows me to go do that, and I know the probability of getting COVID again, in that place is worth it in that situation.
Brad Kirby:And as usual, I'm in the middle. I'm not okay with the Vietnamese government taking a photocopy of my passport. But if my driver's license and nobody has access to it to an encrypted database that OCRs my data and puts it into a form then that's okay. But I'm always skeptical of that, too. Like, I'm definitely skeptical of it. And I can't find my paper vaccine. That's the only record right now. So I have as of right now, I don't have a vaccine passport. So I'd rather have it digitally secured. Like I'd rather have the QR code than have a piece of paper that someone could I mean, it doesn't again.
Dean Nelson:I remember Brad, really importantly here last time I hacked your computer, I backed everything up. I have your vaccine, so don't worry.
Brad Kirby:How much do you want for it?
Dean Nelson:Well, I've already modified it and sold it so it's okay.
James Thomason:There's a Bitcoin address coming to your chat right now. So just send 100 bucks there and Dean's gonna take care of this.
Brad Kirby:You're gonna get a ransomware screen pop up.
James Thomason:Yeah, exactly.
Dean Nelson:Yeah, it's got my emote on it my emoji
Brad Kirby:I'm waiting for that ransomware that ransomware pop up. That's, that's going to be the next hack, I'm sure.
James Thomason:Well, having kicked this dead horse thoroughly, and we're a balanced show, right? So we're not we're not all one way or the other diversity of opinion here. And so we're gonna go find some guests to come and talk about this privacy topic. It's something that's important to me. And I think everyone fellow co-hosts here in the audience as well. So we're gonna we're gonna do some more privacy guests coming up. TBD, to be announced. So but let's switch gears a little bit. Back to the cloud. Remember, the cloud is a happy place, all your computing is there. Apple's not looking at your photos. Let's, let's talk about the cloud where well, okay, Nvidia. Nvidia is a company I like it's a stock that I own disclaimer. So it's one I'm keeping my eye on. And you know Dean I want to get your opi ion on on this sucker because h re's a few things to note. So th stock is trading right now n ar all time highs, 190 and 40 cents, I think close today up 56.85% on the year. According to the economist, between 2016 an 2021, its revenues grew by 33%. And its market value's increased from 31 billion to 486 billion in five years, which is now of course eclipsed Intel which was once the chip make darling of the planet. And thei chips to date have been focuse on high performance chips fo gaming and graphics an artificial intelligence in jus under three months to May sale expanded 84% year on year an gross margin hit 64%. So thi company right now is IoTW I o n the world. That's their that s their plan. And they confirm d rumors last year that they we e buying arm. We've talked abo t that a few times on the podcas. That's the Britain-based fi m that designs energy efficie t chips for the world smartphon s and a whole lot of things. Th y are shipping a trillion ch ps this year, I think, yep. In anity. Insanity. So if they pi ked that up for a measly 40 bi lion, they picked that up for wh t Nvidia was valued just five ye rs ago, 40 billion. And now on April 21, the company un eiled plans for its first da a center CPU, which is called Gr ce. And it's a high pe formance chip based on the ar design. Amazon's already be n doing this they have their ow arm chip. I don't know if th y're adopting Grace or not. Bu I know that they already ha e a chip, arm-based chips and ma ket. They're more power ef icient. There's lot of good th ngs about him. Dean, what do yo think? I mean, what are they go ng to announce next? I think th richness of the data center ma ket is really interesting. Wh t are they going to do? I me n, you dealt with so much of th s metal. Where's this going, yo think, with Nvidia?
Dean Nelson:Yeah, I'm definitely a metal head. And I realized I've had conversations last two days with people, even this morning, at 4am connected with some people I haven't talked to in probably seven years, seven or eight years. And they said to you remember back in eBay, we did X, Y and Z like Yeah, I do. And we were ahead. We were early, what it was liquid cooling or high density cabinets, right gas pedals on CPUs to optimize the workload, you know, full integration back into the data center. So at least is like a system. We're definitely adding those things. And now it's all starting to catch back up. So Nvidia, if you think about it, they were behind the eight ball. I mean, they've always been really, really good in gaming, then they found the ways to do this across, I just remember the processing that was going on at Uber, when it came down to self driving. And they're doing all these these analysis on, on the video feeds that are coming back, the Nvidia stuff was really, really critical, because they could just hammer through all that. And now you look at this acquisition with arm, brilliant, by the way, my perspective, and I don't own the stock, I should but and this isn't stock advice. But from a tech standpoint, the reason they're dominating is they've really seen what the future is going to be. They tied into AI early, they saw the way that gaming could be applied towards these machine learning problems. They saw how deep learning and other stuff would be leveraging the chips, and they aligned all that. And so it was a brilliant move. And I think that the company that's able to now integrate all these pieces as a system. And when I say that, I mean from the concrete up, where you now have an ecosystem of components that are working together. Because right now we still have this disconnect between the compute the storage, the network, and the power in the data center and the cooling, right. They're all kind of separate components. Virtualization has done a lot of things to go back and optimize. But in the end, when you have all the feeds from all these things that are actually saying taking triggers and making decisions based on real time data, to be able to process in the way you need to, you make a system that an entire data center with everything in it is like an engine. And that engine is highly tuned to highly perform and it will be able to optimize everything it needs to do. Then you take it one step further and you start optimizing that across these data centers. Then you're moving workload around it's like this utopia we talked about before of this is where the future is going to be for cloud computing and everything is released based on where the best power prices are the most renewable energy and the highest performance with the right temperature etc., all that stuff, right is coming to fruition now. And if you think about it, the edge stuff we're working on together, right down to the street corner, is all about optimizing the right thing for the right workload. There's a reason that people are asking for GPU, FPGA and CPU and storage type things and arm at that far edge. Why? Because there's going to be certain things are going to be rapidly done. And that distributed nature of all those things. Well who? Who owns it? Right now Nvidia is dominating and with by grabbing arm, the ones that are competing with them. This is why we you said Intel, Intel's, again, my perspective, Intel kind of lost the path. They were putting little GPU things and other stuff, but they just underestimated the threat of Nvidia. And they got to catch back up. Nvidia's just taken off, right. But you think about arm that was a big threat just even, eight years ago. We're saying Oh, all these arm single processes are going to come in, they're going to place all these multi core processors. They didn't really do that. Because there's specific workloads. How about now where they've broken it apart, and how memory is accessed, and CPUs, right? And everything is in Flash, right? Like there's just the performance, that system is going to come together. It's like breaking them all down into components across the data center. Nvidia is extremely well positioned in that one. And I think they're gonna continue to dominate. I mean, the other part is the vehicles. And all those sensors. You said a trillion of that, right?
James Thomason:Yeah, trillion. And that's, I mean, it all hinges on this acquisition, right. If Nvidia pulls this off, and solidifies a merger with arm, I think they're, they're the best position company in the world for the Internet of Things. The true. That's, you know, edge computing IoT wave juggernaut better positioned than Cisco a better position. And I mean, I think they're going to continue to expand from there, they're gonna go by other things that further solidify their position as the leader in the IoT space. And this is where the, this is where the next trillion dollar companies are going to come from right here. I mean, yeah, again, we can't, you know, we can't give investment advice on this show. But my personal opinion for myself, if this goes through, I don't see there's any way that in videos and eventually a trillion dollar plus company, like it's just the market.
Brad Kirby:It's already at 500 billion now, right?
Dean Nelson:Really?
James Thomason:Not quite three, what did they say? 486? They're getting there. Right. So yeah, I mean, the stock doubling is not completely absurd. I think they were trading. Nine times earnings are something over nine times sales, so they're not not outrageous for where they are, compared to the rest of the market. Everything is so frothy, right now it's hard to know where to put any chips. Haha, pun intended. But I think you're so right, Dean. Like we always talk about self driving cars, it's it's top of mind. But it's all the little things that are that are coming where you might be able to take advantage of data that they generate for AI for machine learning for analytics. And I think the fusion of these two in the same packaging can be used also, like machine learning is getting, I should say machine like inference and stuff is getting smaller. Right. So you see projects like TensorFlow, TensorFlow emerged for deep learning in Google's cloud. And they're highly specialized, like TF chips and stuff, their secret sauce, if you will. But other stuff like TF light, where you can take trained models and put them all the way down on embedded devices with a very lean version of of TF. And that's going to continue, right. If you're a tech nerd, like going through their SDK and API guides, it's just fascinating. Nvidia is doing so much stuff. Now on the software side that they that no one talks about
Brad Kirby:TinyML's another another piece of tech. That's pretty interesting. What is it? TinyML, tiny machine learning.
Dean Nelson:Yeah. Okay. That's the distributed stuff. James, is that the same?
James Thomason:No, that's not the same idea, right? It's a very small toolkit for doing stuff at the edge. But no, I mean, there's a bunch of internal Nvidia projects that just haven't seen a lot of wide adoption yet. Because they're so early in my opinion, they're so early. Some of it has to do with in the weeds of how you train models and how you distribute the models and all that. But I think that that's a really interesting area. So I'm not compensated any way for these particular statements. I'd love to get in. If anyone from Nvidia's listening who's in the know, and we know we know a few folks, we'd love to have you on the podcast just to talk more about what Nvidia is doing. Yeah, I think it's a fascinating area. Oh, totally. Yeah, I think we're gonna get someone on.
Dean Nelson:and there's multiple people we should get on. So a guy that used to work with me before I hired him multiple times, Jeremy Rodriguez, he's over there, he's driving the implementation of all the Nvidia farms cloud at all these days. And remember, the program they're landing all over, I think is 20 different providers are putting these in and they're just they're like gobbling up the power at 90% utilization right at these 30 to 50 kilowatt cabinets.
James Thomason:I was just about to say that that the power utilization of these things is staggering. Watt density per rack, they're beasts.
Dean Nelson:Which is hilarious because remember, I talked about being early, Jeremy and I built up all this stuff for high performance computer that eBay way back in the day so 2010 we were doing 30 kilowatt cabinets by 2012. There are 50 kilowatt cabinets. This is before Nvidia GPU stuff, it was really going into their pre packaged units. So the whole point was to maximize what was in a cabinet. So now you look at it 50 is kind of the low, because they could get 100 kilowatts in a cabinet because I mean, there's like four kilowatts in each block that they're consuming. You can put 12 of those easily inside, right. Anyways, he's rolling that back out, we should get him on and just talk about what, what he's working on.
Brad Kirby:So I have a question for you guys. Like, actually one of our regular listeners. His name is Charlie Ashton. He works for a company called Napatech and they do SmartNICs. And he had a question about Amelia because that Amelia episode just came, I said, but what does she run on? you happen to know like what she's on? I might not know. But if I'd be curious how I do. Yeah, there you go.
Dean Nelson:So Amelia runs 100% in the cloud. 100%.
Brad Kirby:That's why she's so slow to respond to me that. Oh. It's true. She's a bit slow.
James Thomason:I think Brad continued to harass her after the show. Didn't you go ask her more Nietzsche questions, Brad?
Brad Kirby:Oh, yeah, I asked her the same Nietzsche question. That crashed her twice. And she did respond or asked what is the question? I'll paraphrase it? Oh, I can't remember it.
James Thomason:It's that quote about staring into the abyss and the abyss looks back at you. Yeah.
Brad Kirby:She said that she would stare back into the abyss. And then she said, We are all digital slaves, but at least we'll be happy.
Dean Nelson:I'm happy. Oh, man. Does she have a vaccine card? I just want to find out. That's Yeah, right.
James Thomason:He's gonna ask for a show, you know.
Dean Nelson:Do you have a vaccine card? Yeah, yeah. So like, for IP software, Amelia, the thing is they did the transition into into Cloud specifically because they can scale to 100x. Beyond digital colleagues that can go up. They needed the ability to do that. Right. So yeah, that was a fun episode. It's great having him on. I really think she needs to move into the just the data processing. And I have no doubt that's going to be there. Because Look, she's already she's already in cloud. It's pretty simple to just distribute out to the pins, right?
Brad Kirby:Yeah, I guess it depends on because you're pulling from the API from GPT-3, right? They're effectively taking all that data. So in terms of the processing, and all the algorithms, it's all happening in the cloud, moving all of that into the edge. That's the problem that we're solving for it really.
Dean Nelson:To me, this is just like what happens in CDN and things you do distribute out certain things, serverless, etc. to the stuff that's local so there's no reason why this couldn't flow the same way. I love the fact that so now you're going to have the amilia assistant or whatever else it is in your office. You're saying these things is all hidden edge competing on her feet from you.
Brad Kirby:Yeah, we might hire her too for maybe we will the office.
James Thomason:She can take over the CTO job.
Dean Nelson:I think you got a crush on Amelia Brad. I think that's what it is. You just want to be is one hang around.
Brad Kirby:Okay, just because I asked her out on a date.
Dean Nelson:That was part of your test.
James Thomason:Brad's wife is gonna be like, who's this Amelia?
Brad Kirby:She gave me her stink eye when she listened to that. She has one eyebrow that goes up and she gives me the look. No, I don't have a crush on anyone except for her.
James Thomason:Not even us. You're good. You're good husband.
Dean Nelson:Come on, man. Bromance?.
Brad Kirby:This is different man. Yep.
James Thomason:There we go. You can get a little spoon Brad.
Brad Kirby:Sometimes the big spoon though.
Dean Nelson:Okay, stopping that picture stopping that picture.
James Thomason:Mental block mental block. Okay. Well, unless you're paying really close attention, you might have missed Elon Musk's quiet acquisition, very quiet acquisition of a little company called Swarm that was doing some pretty cool stuff. And it ties right into the 5G megatrend. Brad, what is swarm? And what do you think SpaceX is doing?
Brad Kirby:Now it's a 5G and IoT really. So they didn't disclose the financial terms of the transaction. But they're valued at 85 million back in January 2019. And about 30 employees there, but they operate 120 little smartphone sized satellites, as well as the ground network that was really to take on the small sat, low Earth orbit type market. And it's really a direct play for Starlink to enter into the IoT and 5g market and a couple years ago. I think they were there's 2018 they actually rented some problems with the FCC. And as you guys know, SpaceX and starlink has a pretty strong legal team for you know, that kind of lobbying with the FCC, because that's that's always been one of the major issues around satellite communications. It's going back to Lightspeed and Harbinger and, and Phil Falcone, which was one of the funds I liquidated in 2011.
Dean Nelson:Such a small world.
Brad Kirby:Yeah, full circle. So I think I think this is really just a natural play for SpaceX to move into closer to things and into the edge and IoT.
Dean Nelson:Yeah, my understanding is that the Swarm satellites communicate with their antennas on the ground. And with what's that's what the Swarm Tile is, that can be embedded into circuit boards and to connect to IoT devices to a communications network. So this Swarm is really does all these things working together like a Swarm of bees. Right, right. And this Swarm Tile, I guess, is priced at like $119. That's pretty cheap. pretty cheap. Yeah, yeah. And it's larger standalone evaluation kit is like 500 bucks. But they charge five bucks a month and subscription fee is a network that's pretty cheap. Swarm offers services for a wide variety of those IoT uses, and that's like agriculture, maritime energy, environmental and transportation sectors. So very interesting company and now we're talking about world domination, we'll see what he's up to next.
James Thomason:IOTW, the IOTW plan a very remote and this is this is one that pains me because SpaceX is one I'd like to invest in directly, because I'm pretty bullish on SpaceX, and it's many little children that are spinning out, but I'm like way less bullish on Tesla. I think Tesla is going to be in trouble sooner or later.
Brad Kirby:No, no, Dr. Albright is very bullish on Starlink. I remember Julie said that she's very bullish. That's even a subsidiary of SpaceX.
James Thomason:Yeah. So SpaceX, Starlink. And so the only way to get access to this thing apart from like, I guess buying restricted stock off of somebody who has it, who probably won't sell it to you. I mean, Google actually has a stake in SpaceX. Right? So they put if memory serves about a billion dollars into SpaceX back in 2015. And so I found a lot of people don't know that they Google, Google's got to get a taste. And there's a lot of synergies between those companies between Google and starlink, and SpaceX and whole little, all this little portfolio that Ilan is amassing under that umbrella. So I find that particularly appealing, and I wish he'd spin these things out a bit.
Brad Kirby:If only you could buy equities on the secondary market like tokenization of securities and be that easy. If only
James Thomason:Wow, what pace
Brad Kirby:Crypto Brad.
James Thomason:Speaking of crypto speaking of crypto, the SEC chair this week called for crypto regulation. He didn't mince words. Describe cryptocurrency is rife with fraud scams and abuse in certain applications. I think that's very stern coming from the SEC Chairman, but it's definitely on the mark. Right? I mean, the these NFT people are crazy. That's just the crazy cut and paste eight bit imagery for$5,000 a pop is crazy. Good for the people who are making money in it, I guess at the moment but data for the people who end up owning NF T's. So he went on to say that crypto has been and could continue to be a catalyst for change in the fields of finance and money. But it's currently highly speculative, dangerous for investors, blah, blah, blah, blah. It certainly seems like the clown hammer is coming.
Brad Kirby:Yeah. And caveat it with it wasn't. Those are his own words. He did caveat that it's not the view of the SEC yada yada yada, but effectively, you know.
Dean Nelson:But he's speaking.
Brad Kirby:Yeah, so again, so Genzler's always been the guy that's in front of the Congress on anything to do with Bitcoin or crypto. He's always they love him. So that's why ultimately, it's been kind of interesting because we didn't know which direction he was going to go on the regulatory side once he got put to the position of SEC chair. So it's certainly a foray into where he's leaning. To follow on from what the senate infrastructure bill and the the IRS code amendment and bringing in all digital assets, the scope of brokerages, so it's, it's not surprising, but nonetheless, it's certainly a sign of things to come.
James Thomason:Well, they started by cracking down on ICOs, and they basically said, if you did an ICO, we're gonna find you and or put you in jail or bad things will happen to you. So better, better get with the program, but we don't know what the program is yet. So there's no getting with it. And it's kind of been that they have they have crackdown on ICO sites and sites that promoted ICOs, they, I mean, they they continue to expand on
Brad Kirby:McAfee could tell.
James Thomason:McAfee would have told you, RIP. So this, this seems like it's going to get a whole lot worse before it gets better. But I have to say I cannot for the life of me summon the will to invest in Bitcoin. I just I can't do it. I mean, I could do it for a flip trade, you know, tiny, tiny trade or whatever that is, I don't give a crap about 1%. But in any real any real mature material way. I just can't. But I think what you were saying, Brad, when you like regulated securities offerings through tokens, where you can carve out little bits of companies that is really interesting. And I hope, I hope we start seeing a lot more of those regulated token offerings that are going to legitimize this space. Yeah, of course, it won't be nearly as exciting when people can't sell something, they painted on their toenails and took a photo of and copied 50 times for $5,000 a piece. Yeah. But on the other hand, you might actually make money and keep money.
Brad Kirby:I can't invest in it either. But I think if I had a data center, I had the infrastructure, I could certainly mine it. Have no problem if I had ASICs and with everything that's coming to China, I could certainly do that because why not?
James Thomason:You know, when the gold rush is commonly cited that some of the people who got wealthiest were the ones selling shovels, shovels, picks and picks and shovels, right? And speaking of that, there's this one headline from last week caught my eye about this company called VPS, or Virtual Power Systems. This guy, Dean Nelson is CEO of it, and there was press that said this little startup who's an innovator in the power space was getting into the crypto game. A little bit, Dean, care to comment on and explain this press a little bit.
Dean Nelson:Yeah, that crazy CEO of VPS. What's up with that? So what's up? Yeah, I did a podcast with you Yegeny over at Data Center Knowledge. And we talked to a whole bunch of topics. And one of those was around crypto and the opportunity that we see. And so we've been exploring this for a while. And the thing is, if you look at the way that crypto is put together today, the actual mining itself, since 80 to 85% is Bitcoin, as far as power draw globally, they really have figured out how to tune those machines. If you think about the generations of them as they've come along, now that can be in high temperature areas that have high performance. And so like when we were visiting one of these out in Nebraska, it's 94 degrees, and the so the inlet to the actual systems is 94. And the outlets like 160 plus Fahrenheit, so 60 to 70 degree delta t between these things, and they're cranking along, and they've tuned the boxes to be able to say placement, airflow, etc. But they don't need an air conditioning at that point. But the thing that was interesting in our analysis is that they're they're kind of nascent when it comes down to where they are from a data center perspective, because they just simplified cost on everything, I got a transformer, I'm putting power into a three phase distribution, I'm putting a bunch of machines in a box, I'm putting fans on one side, right, and I'm sucking air through to extract the heat. And then I'm just doing as many hash rates as I possibly can. And so what we saw is as the interfaces they show of how the machines are functioning, but they're not really looking at the monitoring of that actual performance. So you think about the tuning of that. So they say we're at 95 to 98% utilization. Great. So when you have that utilization, what's stopping you from going to 100? Well, it's the when they spin up the machines and the variations of that. And when they kind of get to the right frequency, there's a lot of variability inside of the load. So they have to have some kind of headroom, because if they go too high, they trip the circuit. And if they trip the circuit, because there happens to be maybe a gust of wind, somebody opens a door or the temperature goes up something, it's really, really volatile at that upper end. So they have to throttle some things back. And so for virtual power systems, it was we're trying to drive the utilization up and use every watt as we possibly can. So think about these machines, they have a whole nother level that people don't leverage. That's like overclocking on CPUs, or a gas pedal on these machines. And usually, the reason they don't press that gas pedal down is: first off, they don't have enough power and how they're distributed because they've done it so they keep it at that ceiling. Secondly, it's too damn hot. Because when you actually put that gas pedal down, the machines working even harder and you got a 70 degree delta t, it becomes a challenge. So if you can start to now monitor all those aspects, you can enable that gas pedal to go down. Why? Because we have a thing called a phase balancer that allows you to get rid of these variations, and that frees up capacity. And then we got a thing called energy injection that allows us to add energy in so that when you spike above, you're clipping that off, you don't trip the circuits, very basic things that would go back and say I get that 95 and 98 to 100% and get to 102% all the time. So it's another tuning aspect. And if that's the case, then you could say, alright, my power consumption costs to my compute capability to my headroom when it comes to power. If I press that gas pedal down and do more hash, will I make more money? And the answer is yes. If you can get more hash rates done, you have more opportunity to win that coin.
James Thomason:Yeah, I'll just say a few, a few percentage points across these whole data center clusters, right. I mean, that's actually a lot of hashes.
Dean Nelson:It's hundreds of megawatts at a time, right? And so what's the headroom across that 3% of 100 megawatts is quite a bit of computing power.
James Thomason:That's a lot of power. Yeah.
Dean Nelson:Yeah. And then there's gigawatts coming into the country right now, just in the United States. You guys seen that? Where we talked about this with this huge influx from China, and the machines have got to go somewhere. So I mean, people are getting calls to say I need 400 megawatts. 400 megawatts in a single deployment. And I need it at six cents a kilowatt hour or less all in? Yeah. Okay. So that limits where it goes. Anyways, that's where for us there's there's just another opportunity to eek out more performance out of a system that's highly tuned already set another level.
James Thomason:It's crazy interesting. Well, folks, check out this podcast. That's the Data Center Podcast. Available on Apple podcast, Spotify, Google podcast stitcher and wherever podcasts are sold there we go. I pretty much read the transcript I haven't listened to show myself but it looks really interesting Dean so I'm gonna put on my list as well. Yeah. Well, folks, if you enjoy shows, such as this one where we keep you up to date with the latest and greatest in tech, please do give us a like and helps us grow our audience. Our podcast is sponsored by Infrastructure Masons, uniting builders of the digital age. Learn how you can participate by going to web the
https://imasons.org that's http://imasons.org. And by EDJX building a new distributed edge computing platform for all the things learn how you can build serverless apps at the far edge by visiting us on the web at https://edjx.io. That's//edjx.io.